)
The growth in exports this year would mainly come from Goa, where the Supreme Court has allowed auction of around 15 million tonnes.
The Apex Court is also expected to pave way for resumption of mining in the current year. The Court is set to pass an order on the recommendation of CEC for a cap of 20 million tonnes production per annum on April 15.
In 2014-15, the projected growth in exports is mainly due to the movement starting from Goa. If the total 15 million tonnes of iron ore is sold and evacuated from Goa, then India's exports could go up by at least 15 million tonnes by the end of the current fiscal to take the tally to 30 million tonnes.
"On the contrary the delay in the auctions and the upcoming monsoon season is likely to delay the exports from Goa. Also, the restricted movement of iron ore from Odisha to Vizag would be another hurdle in increasing the exports this year," said Prakash Duvvuri, head of research, OreTeam Research.
However, exports of low-grade iron ore from Goa might be affected if the Chinese government strictly enforces its recent environment legislation that prevents usage of low grade iron ore in steel making. According to experts, the high silica and alumina content in iron ore requires steel mills to use excess coal and energy for conversion into steel. So, the steel mills might avoid importing low-grade ore with Fe content below 46-48%.
"The new pollution control regulation from China will not be applicable to ore from Goa because traditionally Goan ore is above 48% Fe. Export of ore from other countries like Indonesia, Malaysia and Iran to China might be affected because these countries export very low-grade iron ore," Duvvuri said.
Glen Kalavampara, secretary, Goa Mineral Ore Exporters Association said Goan exporters have been by and large exporting 50% and above grade ore. So, the Chinese regulations will not affect their chances. "We have exported below 46% in the past but not much. The exporters have entered into long-term supply contracts with Chinese mills and they may not be impacted much," he said.
Earlier this week, Goa exported first shipment of around 65,000 tonnes iron ore to China after the recent e-auctions. Goa has auctioned 1.5 million tonnes of ore in two rounds till now.
"If the China imposes restrictions, then the miners in Goa could go for beneficiation and export the enriched material to China. However, there will be no direct impact on the Goan miners because they have been exporting ore with 56-57% Fe grade," said Ritesh Shah, Lead Analyst, Espirito Santo Securities.
In 2013-14, exports were majorly from the East coast as Goa and Karnataka have mining and export ban imposed in the states.
March 2014 alone, had an export volume of 1.1236 million tonnes of which MMTC shipped 135,600 tonnes to Japan while Essar & Stemcor shipped pellets to West Asia summing up to 106,326 tonnes.
The main reasons behind the fall in the exports in FY14 are the imposition of export duty on iron ore pellets at 5% and falling spot market prices globally, which restricted the Indian miners from securing good deals.
Meanwhile, the average iron ore prices in the spot market dropped to $127.55 per tonne CFR China (63.5/63% Fe fines) in 2013-14 from $133.03 per tonne witnessed in 2012-13, a drop of nearly 4.1% year-on-year. Also, on quarterly basis, in the last quarter of FY14, the prices slipped to an average of $121.86 per tonne from an average of $148.41 recorded in the same quarter last year registering a drop of nearly 18%.
| Iron ore exports | ||
| Year | Exports (Million Tons) | |
| 2008-09 | 105.86 | |
| 2009-10 | 117.37 | |
| 2010-11 | 97.66 | |
| 2011-12 | 61.74 | |
| 2012-13 | 18.66 | |
| 2013-14 | 15.13 | |
| Source: Federation of Indian Mineral Industries & OreTeam | ||
